The Indian rupee showcased resilience on April 3, closing 7 paise higher at 85.44 against the US dollar after overcoming early session losses. This gain came even as most Asian currencies weakened following US President Donald Trump’s announcement of aggressive reciprocal tariffs.
The rupee’s strength was largely driven by a weaker US dollar, which slid against major global peers amid concerns over a potential US recession and inflationary pressures triggered by the tariffs. The dollar index, which measures the greenback’s strength against six major currencies, fell sharply from 103.807 to 101.533, its lowest level since October 1.
Trump’s Tariff Move Hits Global Currencies
Earlier in the day, Trump unveiled sweeping tariff measures against several key trading partners. The US imposed:
✅ 27% tariff on Indian goods
✅ 20% on the European Union
✅ 25% on South Korea
✅ 24% on Japan
✅ 32% on Taiwan
India, which was accused of imposing a 52% tariff on US goods, was slapped with a “discounted reciprocal tariff” of 26%, according to Trump’s statement. However, an annexure from the White House later clarified India’s tariff rate at 27%.
Market Experts Weigh In
“The rupee initially struggled but gained momentum as the dollar weakened, reflecting global concerns over the economic impact of these tariffs,” said Dilip Parmar, Senior Research Analyst at HDFC Securities.
Meanwhile, Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, noted that the dollar index’s decline signaled growing market fears of a potential economic slowdown in the US, with projections of sub-zero growth and 5% inflation. He added that the next support for the dollar index stands at 100.20.
Despite these global challenges, the rupee’s recovery highlights India’s relative stability in the face of volatile international trade policies. Analysts now look ahead to how New Delhi and other nations respond to Trump’s latest trade measures.